Sustainability and Corporate Mechanisms in Asia

This book provides a comparative and critical analysis of why and how six corporate mechanisms have been or can be used to promote sustainability in four leading common law jurisdictions in Asia. It examines whether and how these mechanisms should be reconceptualized to promote sustainability in an environment characterized by controlling shareholders, particularly the government in state-owned enterprises.

Format: Paperback / softback
Length: 429 pages
Publication date: 13 April 2023
Publisher: Cambridge University Press

This groundbreaking book is the first to offer a comprehensive and critical examination of why and how six corporate mechanisms - sustainability reporting, board gender diversity, constituency directors, stewardship codes, directors' duty to act in the company's best interests, and liability on companies, shareholders, and directors - have been or can be utilized to promote sustainability in the four leading common law jurisdictions in Asia (Singapore, Hong Kong, India, and Malaysia). A crucial question at the forefront is whether and, if so, how these corporate mechanisms should be reimagined to foster sustainability in an environment characterized by controlling shareholders, particularly in state-owned enterprises. Given that controlling shareholders are the prevailing norm for the majority of companies worldwide, and state-owned enterprises play a significant role, this book offers invaluable insights into the challenges and opportunities of advancing sustainability in concentrated and mixed ownership jurisdictions.

Sustainability reporting has emerged as a prominent mechanism to promote sustainability in corporations. Companies are increasingly disclosing their environmental, social, and governance (ESG) practices and performance through sustainability reports, providing stakeholders with a clear understanding of their sustainability initiatives and risks. Board gender diversity has also gained attention as a means to promote sustainability. Studies have shown that companies with diverse boards are more likely to prioritize sustainability issues and make more sustainable decisions. Constituency directors, who represent the interests of specific stakeholders, such as employees, customers, and local communities, can also contribute to promoting sustainability by advocating for policies and practices that align with sustainability goals. Stewardship codes, which set out the responsibilities of companies and their directors in promoting sustainability, have also gained traction in recent years. Directors are expected to act in the best interests of the company and its shareholders, including considering the long-term impacts of their decisions on sustainability. Liability on companies, shareholders, and directors has also been used as a means to promote sustainability. Companies are held accountable for their sustainability practices through legal mechanisms, such as lawsuits and regulatory actions, which can encourage them to prioritize sustainability and make more sustainable decisions.

However, there are challenges associated with these corporate mechanisms. One of the primary challenges is the influence of controlling shareholders, particularly in state-owned enterprises. Controlling shareholders may have a significant stake in the company and may prioritize short-term financial gains over sustainability concerns. This can lead to resistance to sustainability initiatives and policies. Additionally, state-owned enterprises may face unique challenges in promoting sustainability, such as political interference and a lack of transparency.

To address these challenges, there are several strategies that can be employed. One approach is to reconceptualize these corporate mechanisms to better align with sustainability goals. This could involve incorporating sustainability metrics into financial reporting, expanding the role of constituency directors, and developing more robust stewardship codes. Additionally, governments and regulatory bodies can play a role in promoting sustainability by setting sustainability standards and regulations and encouraging companies to disclose their sustainability practices.

In conclusion, this groundbreaking book provides a comprehensive and critical examination of why and how six corporate mechanisms have been or can be used to promote sustainability in the four leading common law jurisdictions
jurisdictions in Asia. The book highlights the challenges associated with these mechanisms and offers strategies for reconceptualizing them to better align with sustainability goals. By promoting sustainability through these mechanisms, corporations can contribute to the global effort to address climate change, social inequality, and environmental degradation.

Weight: 618g
ISBN-13: 9781009376235